Treasury Reiterates Warning US Government Could Run Out of Money to Service Debt By October

WASHINGTON (Sputnik) – The US government could run out of money as early as next month to service its debt, Treasury Secretary Janet Yellen said on Wednesday, reiterating her warning that emergency measures put in place to raise cash could be exhausted soon.

“Given this uncertainty, the Treasury Department is not able to provide a specific estimate of how long the extraordinary measures will last,” Yellen said in a copy of her letter to Pelosi, released by the department. “However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October.”
These were flexible investments that could be made in due course, and other US treasury secretaries have also suspended them as well in times of emergency, she said.

“Our estimates of the period of time that extraordinary measures will last have been refined in recent weeks, although they continue to be subject to considerable uncertainty due to the normal challenges of forecasting the payments and receipts of the US government, including the uncertainty in the level of corporate and individual taxes due September 15, heightened by the additional uncertainty due to the pandemic and related economic relief, and other factors,” Yellen said. “Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history”.

Negotiations on the debt ceiling between Democrat lawmakers led by President Joe Biden and their Republican rivals have dragged on for months, with no immediate solution in sight. Democrats and Republicans have squared off over the debt ceiling several times over the past decade and briefly allowed the United States to surpass it during the Trump administration.
“We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States”, Yellen said.

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